AlixPartners claims chip shortage will cost auto industry $ 210 billion, 7.7 million units in 2021

Consulting firm AlixPartners said on Thursday that the current semiconductor chip shortage will cost the global auto industry $ 210 billion this year, a bigger loss in revenue than previously thought.

That figure is significantly higher than the company’s May forecast, in which it estimated a loss of $ 110 billion.

AlixPartners also claims that the production of 7.7 million units could be lost. That’s nearly double the 3.9 million units the company estimated would be lost when it released its May forecast.

“Of course, everyone had hoped the chip crisis would have eased further, but unfortunate events such as the COVID-19 lockdowns in Malaysia and lingering problems elsewhere have exacerbated things,” Mark Wakefield, co-leader global automotive and manufacturing practice at AlixPartners, said in a statement.

One problem is that there are hardly any “shock absorbers” left in the industry for producing or obtaining materials, said Dan Hearsch, general manager of the automotive and manufacturing practice of AlixPartners.

“Virtually any shortage or disruption in production in any part of the world affects businesses around the world, and the impacts are now magnified due to all other shortages,” Hearsch said in a statement.